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Digital Privacy

Abstract : We study the incentives of a digital business to collect and protect users’ information. The information the business collects improves the service it provides to consumers, but it may also be accessed, at a cost, by third strategic parties in a way that harms users, imposing privacy costs. We characterize how the revenue model of the business shapes the equilibrium data policy. We compare the equilibrium data policy with the social optimum and show that a two-pronged policy, which combines a minimal data protection requirement with a tax proportional to the amount of data collected, restores efficiency.
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Preprints, Working Papers, ...
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https://hal-hec.archives-ouvertes.fr/hal-02896509
Contributor : Antoine Haldemann <>
Submitted on : Friday, July 10, 2020 - 3:40:39 PM
Last modification on : Saturday, July 11, 2020 - 3:51:04 AM

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Itay Perah Fainmesser, Andrea Galeotti, Ruslan Momot. Digital Privacy. 2020. ⟨hal-02896509⟩

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